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Tesla Beats Q1 Earnings and Revenue Estimates: ETFs to Soar

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After the closing bell on Wednesday, Tesla Motors (TSLA - Free Report) surprised Wall Street by reporting stellar first-quarter results amid the coronavirus crisis. It easily topped earnings and revenue estimates.

Q1 Earnings in Focus

Adjusted earnings per share came in at 8 cents, well above the Zacks Consensus Estimate of loss of $1.57. The company had incurred loss of $4.10 in the year-ago quarter. Revenues jumped 32% year over year to $5.99 billion and edged past the Zacks Consensus Estimate of $5.37 billion.

Amid the coronavirus crisis, Tesla was able to achieve its best first quarter results for both production and deliveries. The company produced 102,672 (87,282 Model 3 and Y, and 15,390 Model S and X) vehicles and delivered 88,400 (76,200 Model 3 and Y, and 12,200 Model S and X) vehicles. Though the delivery number is 21% down from the previous quarter, it is higher than 77,100 produced in the year-ago quarter (read: ETFs to Ride High on Tesla's Robust Q1 Delivery Numbers).

The robust numbers were attributed to “record levels of production” from the new Gigafactory in Shanghai, China, which began operations in late 2019. Additionally, Model Y production started in January and deliveries began in March, adding to the strong numbers.

Though the electric carmaker did not provide guidance, it said, “it will achieve industry-leading operating margins and profitability with capacity expansion and localization plans underway.”

Given robust results, shares of Tesla spiked as much as 10% in aftermarket trading on elevated volumes. The stock currently has a Zacks Rank #3 (Hold) and Growth Score of A. However, it belongs to a bottom-ranked Zacks industry (in the bottom 2%).

ETFs to Buy

Investors seeking to tap Tesla’s growth should buy ETFs having substantial allocation to this luxury carmaker. We highlight five of them in detail below.

First Trust NASDAQ Global Auto ETF (CARZ - Free Report)

This fund offers a pure play global exposure to 33 auto stocks by tracking the NASDAQ OMX Global Auto Index. Tesla is the top firm accounting for 21.3% share. CARZ has a lower level of $15.1 million in AUM and charges 70 bps in fees per year. The product has a Zacks ETF Rank #3 with High risk outlook (read: Q1 Auto Sales Hit by Coronavirus: ETF & Stocks in Focus).

First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report)

This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $169.7 million. It charges 60 bps in fees per year and holds 41 securities with Tesla Motors taking the top spot at 18.1%. It has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Global X Lithium & Battery Tech ETF (LIT - Free Report)

The product provides global exposure to a broad range of firms engaged in lithium mining, refining, and battery production by tracking the Solactive Global Lithium Index. Holding 41 securities in its basket, Tesla occupies the second position with 13.6% share. The fund has amassed $435.7 million in AUM and charges 75 bps in annual fees.

ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report)

This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services as well as technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials and transportation. This approach results in a basket of 36 stocks with TSLA occupying the top spot with 12.6% share. The product has accumulated $189.5 million in its asset base and charges 75 bps in fees per year (read: Buy the Dip in Tech ETFs).

MicroSectors FANG+ ETN (FNGS - Free Report)

This ETN is linked to the performance of the NYSE FANG+ Index, which is an equal-dollar weighted index, designed to provide exposure to a group of highly-traded growth stocks of next generation technology and tech-enabled companies. It holds 10 equal-weighted stocks in its basket with Tesla accounting for 10% share. The product has accumulated $36 million in its asset base and charges 58 bps in annual fees.

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